International Economic Law and Policy Blog

Hillary Clinton Talks Trade with the FT

Hillary Clinton did an interview with the FT on trade and economic issues.  I'll probably come back to this later, but one thing she said jumped out at me and I wanted to mention it here:

And I agree with Paul Samuelson, the very famous economist, who has recently spoken and written about how comparative advantage as it is classically understood may not be descriptive of the 21st century economy in which we find ourselves.

Did Samuelson really say something along those lines?  I'm curious if anyone knows what exactly she was referring to it.  I did a quick web search and did not see anything.

ADDED:  There seems to be a good deal of discussion of this point.  An FT editorial says:

Mr Samuelson did not even say what Mrs Clinton thinks he said. In the article she apparently has in mind, and in subsequent remarks, the great man did attack the pieties of the pro-trade lobby, pointing out that not everybody gains and that even nations as a whole can lose from free trade under certain restrictive circumstances.

Though this point was delightedly greeted by the political and pundit classes as a shattering new discovery, in fact Mr Samuelson was restating a decades-old understanding. What Mr Samuelson said was true not just of the 21st century, but also of the 20th – and it is just as irrelevant to the intelligent formulation of trade policy today as it was after 1950, when the liberal trading order was built. If Mr Samuelson, who has never (so far as we know) recommended protectionism, is not scandalised to be quoted in support of a “time-out” on Doha, he should be.

In response, Dani Rodrik says:

And this whole thing about what Paul Samuelson said and meant and whose position it provides support for is such a red-herring.  Hillary should not have brought up Samuelson, but I wish her critics would stick to the issues instead of chiding her for using his name in support.

In addition, Clive Crook says:

I wonder what Samuelson makes of being cited as an intellectual authority for Democratic Party disenchantment with liberal trade. It is one thing to say that it's all very complicated, and that economists should guard against simplistic accounts of the trade issue. It is quite another if, while pondering the complexities, the US turns its back on the liberal trading order. That too would be, as it were, a simplistic outcome--and an extraordinarily damaging one for the US and (more especially) for the developing countries. 

This confirms my initial impression that Samuelson didn't say what she implied.  It's interesting that even Rodrik, who agrees with her broader point, says "Hillary should not have brought up Samuelson."

More later on her suggestion of a "time out" and whether this should be considered "protectionist."

One More Question from the Republican Debate

One more trade related question from the CNN/YouTube Republican debate:

YouTube question: Good evening, candidates. This is (inaudible) from Arlington, Texas, and this question is for Ron Paul.

I've met a lot of your supporters online, but I've noticed that a good number of them seem to buy into this conspiracy theory regarding the Council of Foreign Relations, and some plan to make a North American union by merging the United States with Canada and Mexico.

These supporters of yours seem to think that you also believe in this theory. So my question to you is: Do you really believe in all this, or are people just putting words in your mouth?

Cooper: Congressman Paul, 90 seconds.

Paul: Well, it all depends on what you mean by "all of this." the CFR exists, the Trilateral Commission exists. And it's a, quote, "conspiracy of ideas." This is an ideological battle. Some people believe in globalism. Others of us believe in national sovereignty.

And there is a move on toward a North American union, just like early on there was a move on for a European Union, and it eventually ended up.

And there is a move on toward a North American Union, just like early on there was a move on for a European Union, and eventually ended up. So we had NAFTA and moving toward a NAFTA highway. These are real things. It's not somebody made these up. It's not a conspiracy. They don't talk about it, and they might not admit about it, but there's been money spent on it. There was legislation passed in the Texas legislature unanimously to put a halt on it. They're planning on millions of acres taken by eminent domain for an international highway from Mexico to Canada, which is going to make the immigration problem that much worse.

So it's not so much a secretive conspiracy, it's a contest between ideologies, whether we believe in our institutions here, our national sovereignty, our Constitution, or are we going to further move into the direction of international government, more U.N.

You know, this country goes to war under U.N. resolutions. I don't like big government in Washington, so I don't like this trend toward international government. We have a WTO that wants to control our drug industry, our nutritional products. So, I'm against all that.

But it's not so much as a sinister conspiracy. It's just knowledge is out there. If we look for it, you'll realize that our national sovereignty is under threat.

I think there are some real issues here, so it's a shame to see them discussed in this way, with references to "a move on toward a North American Union" and "a WTO that wants to control our drug industry, our nutritional products."  What I would like to hear is the candidates' views on how much power should be given to international institutions, in what policy areas, and how these institutions should be run.  I know it's a bit out of the mainstream U.S. public policy debate, but it seems to have resonance with at least some people (e.g., Ron Paul supporters), so it would be great to hear the other candidates' views on this.